Comparing countries: the New-Deal-was-fascism claim

Comparing countries is not something most Americans think about a lot. After all, when you're part of the Greatest Country in the World, you don't need to do a lot of comparing, amirite?

Or, as Hillary Clinton put it in 2016 speaking to a group from the Veterans of Foreign Wars (VFW), America is "the greatest country that has ever been created on the face of the earth for all of history." (Hillary Clinton addresses military veterans at the Democratic National Convention Telegraph 07/25/2016, just after 1:10 in the video)

But if we want to look seriously at the relative health of democracies, we have to look at something beyond campaign hyperbole.

I recently took the time to read a book by Wolfgang Schivelbusch, Entfernte Verwandtschaft: Faschismus, Nationalsozialismus, New Deal 1933-1939 (2005). It isn't a very good book. But I had seen it referenced as comparing the policies of the US, Italy, and Germany during the Great Depression. And there are comparisons to be made.

And that makes the level of comparison important. We could say that Sweden is a country, and Libya is a country, so they're both the same. And that's true, as far as it goes. But if we get a bit more specific, we would have to say that Sweden has a functioning national government, while Libya is generally considered to be a failed state. And that's a radical differnce.

So the level of comparison and the scope of it is important. John Kenneth Galbraith wrote in The Age of Uncertainty (1977):

The Nazis were not given to [economics] books. Their reaction was to circumstance, and this served them better than the sound economists served Britain and the United States. From 1933, Hitler borrowed money and spent - and he did it liberally as [John Maynard] Keynes would have advised. It seemed the obvious thing to do, given the unemployment. At first, the spending was mostly for civilian works -railroads, canals, public buildings, the Autobahnen. Exchange control then kept frightened Germans from sending their money abroad and those with rising incomes from spending too much of it on imports.

The results were all a Keynesian could have wished. By late 1935, unemployment was at an end in Germany. By 1936, high income was pulling up prices or making it possible to raise them. Likewise wages were beginning to rise. So a ceiling was put over both prices and wages, and this too worked. Germany, by the late thirties, had full employment at stable prices. It was, in the industrial world, an absolutely unique achievement.

That is a straightforward assessment by a leading Keynesian economist. And it looks at particular mechanisms of economic policy: debt, deficit spending, and infrastructure projects. He draws a contrast to the previous policies of the German Chancellorship of Heinrich Brüning government in Germany (1930-32) and the American Presidency of Herbert Hoover (1929-1933). Both governments had pursued austerity polities, which was the widespread orthodoxy in most of the world. Franklin Roosevelt campaigned in 1932 on balanced budgets. Even leading European Marxist Social Democrats like Rudolf Hilferding and Otto Bauer thought that budget-balancing was the appropriate response to the crisis. The same orthodoxy plagued the social-democratic Labour government of Ramsay MacDonald in Britain.

So it is possible to make meaningful comparisons between countries on how they handled the Depression. But it requires making sensible comparisons while noting differences. But Schivelbusch draws dubious parallels at a high level of generalization that make an unconvincing argument for the point his making about parallels among the New Deal, Italian fascism, and Nazi Germany. He writes:

Nimmt man dazu die heute unbestrittene Tatsache, daß die USA erst durch den 2.Weltkrieg die Wirtschaftskrise überwanden, so ergibt sich ein weiterer wundersamer Parallelismus zwischen Faschismus, Nationalsozialismus und New Deal. Alle drei bedurften zur Überwindung ihrer Wirtschaftskrise einer Rüstungskonjunktur und letztlich des Krieges.

[If one also takes into account the reality, undisputed today, that the USA first overcame the economic crisis by the Second World War, then a additional wondrous parallel among fascism, National Socialism, and the New Deal. All three required an armaments increase and finally the war to overcome the economic crisis.]

That odd statement raised my curiosity about the book's perspective. Because the economy in general was on an upward swing during the 1930s, beginning in 1933 and interrupted by a 13-month recession in 1936-37. A recession whose occurrence had a lot to do with the fact that, despite his militant rhetoric against the "economic royalists" in the 1936 election, FDR switched after the election to budget-balancing, i.e., toward austerity policies, which he had the sense to soon abandon.

But it's a common anti-New Deal and anti-Keynesian argument to say that, see, the New Deal didn't work! It took the war to end the Depression! In American politics, this goes comfortably together with a seemingly endless bipartisan faith in the virtue of military spending. (In the real world, government spending on war mobilization and armaments stimulates the economy in the same way building new posts offices did, by the borrowing money and spending it.)

Unfortunately, his analysis reflects that shaky assumptions and high level of generalization reflected in that statement. He cites a lot of comtemporary sources making comparisons of the New Deal to fascism and National Socialism. He also cites various Americans expressing admiration for Mussolini's policies, leaving a false impression that it was entirely mainstream and respectable in the US to do so. That was not the case.

The contemporary sources he cites include people distinctly on the left politically, including civil rights activist Oswald Garrison Villard; Alfred Bingham, editor of a left-leaning journal called Common Sense; V. F. Calverton, a pseudonym of George Goetz, a left radical who edited a journal called Modern Quarterly; and pro-New Deal writers Gilbert Montague and Ruth E. Shallcross.

But he also cites some very dubious figures as well. The rightwing crackpot isolationist John T. Flynn and the American activist for what he himself called "national socialism," Lawrence Dennis, were among "the sharpest analysts and critics of the New Deal," in Schivelbusch's view. If by that he means polemical, frivolous rightwingers, then I suppose we could agree with him. He or his editors chose to put that assessment in an epilogue. Which was good judgment on their part, because I would have probably stopped reading if they had put it in an introduction. The epilogue at least points out that Flynn was an isolationist and that Dennis is regarded as a fascist. The far right Mises Institute profile of Flynn praises him as a "master polemicist of the Old Right". Gary Younge provides additional biographical information in The fascist who 'passed' for white Guardian 04/04/2007

Schivelbusch includes an alibi comment showing that he's aware that calling Roosevelt and the New Deal "fascist" was a cheap polemical practice of his enemies:

Den Faschismusvergleich, den die Gegner Roosevelts in der tagespolitischen Rhetorik benutzten, können wir wegen seiner durchschaubaren propagandistischen Natur und Willkür unberücksichtigt lassen.

[The fascism comparison that Roosevelt's opponents used in daily political rhetoric, we can ignore because of his transparently propagandistic nature and and arbitrariness.]

But then he praises Flynn and Dennis as sound and insightful sources? Please.

Another of his comparison quotes comes from J.B. Matthews, who served as executive director to Joe McCarthy's Red hunting Senate Investigating Committee. A militant leftist in his younger years, who joined the Socialist Party and also co-authored a book on fascism with Ruth Shallcross publishe by the leftist League for Industrial Democracy in 1934. But by 1938 at the latest, he became a zealous rightwinger. In a biographical article that is balanced and even sympathetic, Nelson Dawson nevertheless leaves the impression that Matthews was an erratic character, at least when it came to political ideology. "It is sometimes difficult to determine precisely what Matthews believed and, indeed, when he believed it," he writes. His career as a Red-hunter pretty much ended after he published an article in the far right American Mercury charging, "The largest single group supporting the Communist apparatus in the United States today is composed of Protestant clergymen." That, Dawson observes drily, was "admittedly an assertion of considerable audacity." (From Fellow Traveler to Anticommunist: The Odyssey of J. B. Matthews Register of the Kentucky Historical Society 84:3; Summer 1986)

That some on the left and the right made (usually) disapproving comparisons of the New Deal with Italian fascism reflects the fact that fascism had the general reputation of being undemocratic and dictatorial. Even Herbert Hoover rolled out the accusation, which Schivelbusch quotes in English, "We must fight again for a government founded on individual liberty and opportunity that was the American vision. If we lose we will continue down this New Deal road to some sort of personal government based upon collectivist theories. Under these ideas ours can become some sort of Fascist government."

But "fascism" was also a useful epithet because, not entirely unlike today, most Americans had only a vague idea of what it meant. Writing in 1960, James Shenton explains (Fascism and Father Coughlin Wisconsin Magazine of History 44:1; Autumn 1960):

Americans have notoriously refused to ft define political terms exactly. Often a single term has been used to cover such a multitude of sins and virtues that the historian or political scientist is left with the impression that he has entered into a wonderland of nonsense. An excellent example of this propensity is the scope with which the word "fascism" was used in depression America. A person unfamiliar with the New Deal era might, after reading the popular magazines and journals of the day, be justified in assuming that fascism was the dominant political mood of America during the 1930's. ...

... fascism [has] been used to describe the Daughters of the American Revolution, Boss Frank Hague, the New Deal - and particularly its NIRA experiment - Huey Long, Franklin D. Roosevelt, the Roman Catholic hierarchy, local chambers of commerce, the American Legion, Tammany, and the Reverend Charles E. Coughlin, among others.

But why would people who were sympathetic to fascism, either overtly or very obviously implicitly, criticize the New Deal as fascist? Because they indulged in sectarian double-talk, for one thing. Part of Lawrence Dennis' schtick was to argue that the Roosevelt Administration and the New Deal were fascist, but a bad fascism. What he wanted to see was a good fascism. Rightwingers today still use this kind of quirky, double-reverse arguments.

Yes, comparisons between countries can be a challenge. One that Wolfgang Schivelbusch's Entfernte Verwandtschaft doesn't rise to meet.